According to a Bloomberg article released recently, the US Treasury Department has called on legislators to expand its authorities for enforcing regulations against foreign entities offering cryptocurrency services. This push aims to protect our country’s security concerns.
Growing Hurdles In Tracing Illicit Crypto Transactions
In his statement for a Senate hearing, Deputy Secretary Adewale O. Adeyemo brought up the increasing difficulty of pinpointing and monitoring individuals suspected of engaging in unlawful activities through the use of cryptocurrencies due to their anonymity features.
Adeyemo warned that cunning adversaries, such as terrorists, are constantly finding new ways to bypass the security measures put in place to deny them use of conventional financial channels.
Adeyemo provided examples of Iran’s Quds Force, which is part of the Islamic Revolutionary Guard Corps, moving funds to militant organizations like Hamas and Palestinian Islamic Jihad in Gaza through cryptocurrencies. He also voiced worries about the growing role of states such as North Korea and Russia in exploiting digital assets for their purposes.
Adeyemo advocates for legislative approval to impose penalties on foreign digital asset providers that enable illicit financing, in response to these threats.
This new tool is intended to enhance the Treasury Department’s flexibility in adjusting its approaches to combating digital assets, which have allegedly weakened the effectiveness of conventional payment systems due to technological advancements.
The Treasury Department aims to gain clear authority to regulate major digital asset companies, such as cryptocurrency exchanges, and has the power to take steps against foreign crypto platforms that use the American financial system inappropriately and potentially endanger national security.
Adeyemo warned that if Congress fails to supply the essential resources, the misuse of digital currencies by malicious actors could escalate significantly.
Battle Against Illicit Finance
Although critics argue that the cryptocurrency sector can be used for money laundering and financing terrorist acts, there are several examples of this industry cooperating with law enforcement to prevent such misuses.
In the course of 2023 and the early part of 2024, Tether, the issuer of stablecoins, collaborated with US authorities and OKX cryptocurrency exchange to halt transactions worth $225 million of their stablecoin that was connected to a criminal organization.
Paolo Ardoino, CEO of Tether, explained that due to the openness and trackability of transactions on public blockchains, it becomes difficult to engage in illegal activities using Tether’s stablecoin, USDT.
Furthermore, during a international event on criminal financing and cryptocurrencies led by Europol, there was emphasis on the importance of enhancing knowledge and skills in the digital sphere to effectively tackle both traditional and cybercrimes as well as money laundering.
At the conference, the importance of cryptocurrencies in helping international crime-fighting agencies stop illicit activities prior to happening was strongly highlighted.
In the US, Senator Cynthia Lummis has repeatedly spoken up for the cryptocurrency sector, believing that the issue isn’t with crypto assets themselves but rather with any harmful individuals operating within it.
In a recent video, Lummis warned against making hasty judgments about a burgeoning industry based on flawed information. He stressed the importance of separating the innovative technology from those who misuse it.
As regulatory bodies and legislators closely examine the sector, these actions underscore a dedication to following rules, thwarting unlawful conduct, and promoting a more secure environment.
Maintaining a continuous partnership among regulators, law enforcement, and cryptocurrency businesses is essential for striking a balance between progress and safety. It’s important to steer clear of overly restrictive regulations and broad prohibitions that may hinder the industry’s growth and prevent its providers from offering their solutions in the US or any other region.
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2024-04-10 00:41